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MSFT-YHOO: People get ready, a change is gonna come…

As someone trapped in the locked down world of enterprise software during the working day, I often think about the nature and rationale for the lock. Generally, people adapt to whatever environment they’re in, and I’ve adapted to the limited, crippled environment in which I have to get work done.

More and more, applications that used to be written in-house are being brought in from the outside, particularly around employee benefits, expense tracking and performance reviews. These are general business functions where outside shops always provide a better software solution than the in-house one. All of these vendor provided solutions are Web-based and are integrated into corporate network identity management systems. In many cases, employee data is stored with the outside vendor. This is a trend that will only accelerate.

One of the locks on the corporate desktop is Microsoft. MS Office rules the roost, it’s the conduit through which all work and communication occurs. A consequence of the lockdown is that change and innovation happens at a very slow rate. In part, this is due to the installed software model of most corporate desktops. Managing tens of thousands of geographically dispersed desktop computers is a highly complex task. Complexity is reduced by simplifying the systems, and eliminating outside influences.

Imagine how much cost and complexity could be reduced if all enterprise applications were delivered via the web. The economics dictate that installed corporate applications must migrate to the web. Or to quote Steve Gillmor from 2005, Office is dead. Some version of this story is at the bottom of the business case for Ray Ozzie’s Office Live. Many have made the case that this software delivery model only makes sense for the SOHO market. Actually it makes even more sense for very large corporations.

So how does this relate to Yahoo? Years of operating in the highly constrained enterprise environment has drawn the boundaries of Microsoft’s imagination. Microsoft needs Yahoo to teach it how to dance to that crazy new music all the kids dig. Once enterprise applications are delivered via the web, the speed of innovation will increase. The surrounding web-based consumer application space is already filled with more powerful tools than the enterprise, particularly in the area of collaboration and knowledge management. Flickr and Delicious are tremendous knowledge management tools. Ray Ozzie sees the change is gonna come, and makes the big move that will help them get ready.

Nicholas Carr’s Big Switch makes the case for the move from the hard drive to the cloud and Matt Ritchtel’s piece in today’s NY Times summarizes. Can Microsoft trade in its lead boots for a new set of led boots? Perhaps Curtis Mayfield and Sam Cooke said it best: People get ready, a change is gonna come.

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